There’s a lot of excitement about chatbots in the insurance space, but as with most emerging technology we tend to miscalculate the potential value. Improving speed and reducing costs are not the best way to measure a new technology like this, even though that’s how the industry likes to track the benefit. We’ve seen a similar pattern with many new IT investments (IT outsourcing, cloud computing, underwriting automation) where at first the goal is speed and cost but in the end those up being secondary benefits, ancillary wins, or even not part of the overall benefit at all. The true value of the investment can’t be leveraged until the industry understands what it is.
Let’s resolve this now: the benefit of a chatbot initiative is NOT improving speed of interactions and NOT about reducing costs. If those were the only benefits insurers would spend more time directing agents and policyholders to their portals or mobile apps, which (for the most part) are already built and are already available 24/7. In fact, a chatbot might very well be a slower interaction than a well-designed portal, where instead of a single page to enter information a consumer needs to walk through a step-by-step conversation to gather data. And, clearly, chatbots are more expensive than sticking with the sunk investments already put into those portals.
There are multiple other values that a chatbot may bring to the table that a traditional call center can’t support and a mobile app or portal may miss, but it comes down to one thing: better experience. What channel do your agents and policyholders want to use to interact with you? It’s harder to quantify than cost and speed, especially because it doesn’t universally apply to everyone. Some people may still want to talk to a human. Some may prefer an app or portal. And some may gravitate towards the chatbot (either text or voice). But creating an additional channel is about offering options, it’s about meeting your customers where they are.
It’s not about cheaper or faster. It’s about better.
This blog entry has been reprinted with permission
